What is a Business Plan?

Most family child care providers probably cringe at the thought of writing a business plan.

Creating a business plan is probably pretty low on your list of favorite activities. It isn't an exciting task, and may even seem quite intimidating, especially if you've never done anything like it before.

A business plan is a written tool that spells out how you will operate your family child care business and can include the following components:

• A start-up plan (for new businesses only)

• A statement of your hopes and goals for the business

• A marketing plan

• An insurance plan

• A program plan

• A professional development plan

• A record-keeping plan

• A financial plan (budget)

Paying closer attention to your business will have a significant payoff, and the hours you spend on planning may end up being the most important time you spend on your business, other than caring for the children.

Preparing a business plan is essential if you are starting a new business, but it is also very useful for an ongoing business, particularly if you want to apply for a business or personal loan. The business planning process offers several advantages:

• A chance to reevaluate and rethink your program. (”Should I try some new marketing approaches?”)

• A financial spring-cleaning. (“Is it time to create a budget to help manage my spending?”)

• A review of your practices to eliminate anything that's outdated. (“Should I overhaul my contract? Should I add more paid vacation time?”)

• A review of your insurance policies to ensure you're adequately covered. (“Is it time to increase the coverage limits on my business liability policy?”)

• Help in meeting your short-term financial goals. (“What changes would allow me to put more money into an emergency fund? Should I cut back on buying toys? Should I start charging for another federal holiday?”)

• Help in meeting your long-term financial goals. (“What changes would let me save more money for retirement? Should I raise my rates? Add another child to my program?”)

There are no rules about how to write a business plan or what to include. It can be as short as 4-5 pages or longer, if you want. The goal is to set down some basics about your business that will help you focus on what is important. Here's a simple outline of a business plan:

Hopes and Goals

A short summary of what you want to accomplish in the coming year (having fun caring for children, meeting a budget goal, getting high marks from parent evaluations, etc.).

Marketing Plan

A list of 2-3 benefits of your program.

A schedule to contact your local Child Care Resource and Referral agency (CCR&R) to update information about your program. Ask the CCR&R about rates charged by other caregivers (homes and centers) in your area.

An annual calendar of planned marketing activities.

Insurance Plan

An annual checkup with your insurance agent to make sure your home, contents of your home, and your car are fully covered for any business use.An annual checkup to ensure that your business is protected through business liability insurance.

Program Plan

A written description of your goals for the number and ages of children you want to care for.A description of your curriculum (formal or informal).

Professional Development Plan

Your goal for attending training workshops or classes for the upcoming year.Your plan to achieve a post-secondary degree (if needed).Membership in local, state, and national family child care associations.

Record-Keeping Plan

A written description of how you will keep records such as: children's attendance, parent payments, Food Program payments, business expenses, hours worked in your home, child care contracts, federal and state tax returns, and monthly bank statements.

Financial Plan

An annual budget and cash flow projection.

Getting Help

If you need help with developing your own business plan, don't hesitate to ask for assistance. You may want to talk to other providers who have already written such a plan. Or talk to your local CCR&R agency or Food Program sponsor for advice or referral to someone who can provide more help. Your tax preparer or financial planner may also be able to help you with certain areas of your business plan.

If it seems too daunting to write an entire business plan all at once, start by focusing on completing one section at a time. It may be easiest to start with a topic that you've already given some thought to or have some experience with.

For example, if you already have some ideas about your professional development goals, then start there.

Once that section is done, move on to another area. There's no rush; try to make steady progress and you'll be done before you know it.

To be most helpful, your business plan should be a living document that evolves as your business changes and you gain experience. I suggest that you review and update your plan periodically — perhaps every year, or whenever there's a change in your personal business circumstances, such as an addition to your family or a move or expansion of your business.

Tom Copeland - www.tomcopelandblog.com

Image credit: https://www.picpedia.org/chalkboard/b/business-plan.html

For details about how to write a business plan, see my book Family Child Care Business Planning Guide.